What an independent claims advocate costs for a building damage claim in New Zealand

The work behind the invoice

An advocate's fee pays for a sequence of tasks rather than a single report. It typically starts with a reading of your policy schedule and wording to identify the sum insured, the basis of settlement, exclusions and any extensions for temporary accommodation, demolition or professional fees.

Then comes the site inspection, where damage is photographed, measured and recorded room by room. The advocate compares that record with the loss adjuster's scope, prepares a counter-scope or commissions trade quotes, and gathers supporting material such as council records or engineering opinions.

The largest share of time often goes into negotiation: meetings with the adjuster, written submissions, responses to queries and the back-and-forth that follows. Good advocates also stay involved after a figure is agreed, checking the settlement documents and making sure payment or managed repairs proceed as promised.

Indicative percentage tiers in NZD

Most residential and small commercial building claims handled by advocates in New Zealand are charged as a percentage, with the rate tending to fall as the size of the claim rises. The table below is an order of magnitude observed on the market, not an official or regulated scale. Individual firms set their own prices and many will quote outside these ranges.

Rates are generally quoted exclusive of GST, which is added at the standard rate of 15 percent where the advocate is GST-registered.

Indicative amounts, to be checked with each expert.

Ways the fee can be calculated

The headline percentage tells you little until you know what it is applied to. Three bases are common, and they can produce very different invoices for the same claim.

• Percentage of the total settlement: the rate applies to everything the insurer pays, including amounts the insurer had already offered before the advocate was engaged
• Percentage of the uplift: the rate applies only to the difference between the insurer's last written offer and the final settlement, which aligns the fee with the value the advocate adds
• Fixed fee: a set price for a defined task, such as reviewing a scope of works or preparing a counter-scope, useful for small or straightforward claims
• Hourly rate: time-based billing, often used for advisory work, file reviews or claims where the outcome is hard to predict
• Minimum fee: some firms set a floor so that small claims still cover the cost of inspection and paperwork

Extra costs to clarify upfront

Ask whether travel, especially to rural areas or other regions, is charged separately. Check who pays for third-party experts such as structural engineers, quantity surveyors, asbestos testing or moisture specialists, and whether those costs are recoverable from the insurer under your policy.

Clarify too what happens if the matter escalates to the Insurance and Financial Services Ombudsman, Financial Services Complaints Limited or litigation. Some engagement letters treat this as a separate mandate with its own pricing.

Will your policy pay the advocate?

Residential house policies in New Zealand often include cover for certain professional fees needed to reinstate the home, such as architects, engineers and consent costs. That cover is aimed at the rebuild or repair itself and frequently does not extend to a claims advocate engaged to negotiate with the insurer.

Commercial property policies sometimes include a claims preparation costs extension, usually subject to a sub-limit and specific conditions. Wording varies widely: some extensions exclude fees of public loss assessors or advocates, others require the insurer's prior consent. Read the policy or ask your broker before assuming any part of the fee will be reimbursed.

How the cost scales with the size of the claim

Small claims carry a proportionally higher rate because the fixed effort of inspection, policy review and correspondence does not shrink with the claim value. Medium claims tend to give the clearest cost-benefit picture. Large claims see lower percentages, but the dollar amount becomes significant and the work involves several specialists.

A worked example

Imagine a storm damages the roof, ceilings and interior linings of a Wellington home. The insurer's adjuster offers NZ$62,000. The homeowner engages an advocate, whose counter-scope identifies missed framing repairs, consent costs and current roofing prices, and the claim settles at NZ$88,000.

With a 9 percent fee on the full settlement, the fee would be NZ$7,920 plus GST, about NZ$9,108 in total. With an 18 percent fee on the uplift only, the fee would be 18 percent of NZ$26,000, so NZ$4,680 plus GST, about NZ$5,382. These figures are illustrative only; they show why the calculation base matters as much as the rate.

Comparing firms and reading the engagement letter

Request at least two written proposals and compare them on the same basis. Price is only one factor: residential construction knowledge, local trade relationships, the seniority of the person handling your file and clarity of reporting all affect results.

Be cautious of anyone who promises a particular payout, pressures you to sign at the door after a storm or asks for a large upfront payment before doing any work. A sound engagement letter is short enough to understand and specific enough to enforce.

• The exact fee basis, rate, minimum and whether GST is included
• When the fee becomes payable and whether it is deducted from the settlement payment
• Which tasks are included and which are charged separately
• How either party can end the engagement and what is owed if you do
• Who in the firm is responsible for your claim and how often you will receive updates

Negotiating the fee

Fees are generally open to discussion. If the insurer has already made a substantial written offer, it is reasonable to ask for an uplift-based fee. For a very large claim, ask for a reduced rate above a threshold or a cap on total fees. If you need only a scope review, ask for a fixed price instead of a percentage.

A clear fee basis, a written engagement letter and a realistic view of what can be gained are the best protection against an unpleasant invoice. Use the indicative tiers from expertdassure.com as a starting point for discussion, not as a promise of price.